The Canary In The Coalmine: India Lifts Export Ban As Onion Prices Plunge

The Indian government has lifted its ban on onion exports after
prices plummeted to Rs 4 - Rs 12 a kilogram (approximately 9c -
27c per 2.2lbs) in part of the country, according to The
Hindu. Prices had hit Rs 70 - Rs 80 per kilogram in December.

The Empowered Group of Ministers (EGoM) on Food approved
shipments of onion at
$600 a ton after farmers began protesting the drop in prices.

Remember, the government banned
onion exports in December when prices peaked and were
to heavy a burden for India's 650 million poor who live on about
Rs. 91 a day. The surge in prices in December presaged the latest
obsession with food prices, and now it's going the other way.

Food inflation eased to
11.05% in the week ending February 5 after rising to 18.32%
in December. Though vegetable prices eased, they remained 24%
higher than a year before.

A Barclays economist in Singapore believes food prices have
peaked and rise in Asian food prices were due to one-off reasons,
according to
MarketWatch but the World Bank is still concerned about food
prices. It released a
report this week saying food prices had pushed 44 million
people to poverty in developing countries.

The World Bank's Food Price Index went up 15% between October
2010 and January 2011 with wheat and corn prices rising the most.